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‘They’re going to hike really aggressively’: Experts predict major interest rate increases this year

Updated: Jan 24, 2022

Interest rate hikes are on the horizon as inflation in Canada continues to soar.

Experts say consumers can expect a slight cooling in the real estate market, continuing high prices for food and other products, and possibly higher wages as well.


The annual pace of inflation climbed to a three-decade high in December 2021, according to Statistics Canada, hitting 4.8 per cent compared to the previous year. The steep rise is driven in part by the higher costs of real estate, food and passenger vehicles. And, as 2022 unfolds, economists say it’s not over yet.

The Bank of Canada is expected to make an announcement next week. And economists are predicting a series of interest rate hikes in the coming year as the bank tries to cool inflation. Some traders are betting on up to six.

TD senior economist James Orlando said TD’s official call this year is for four rate hikes, though the markets are pricing for five or six. Four hikes would bring the Bank of Canada’s interest rates to 1.5 per cent.



The Bank of Canada is expected to make an announcement next week. And economists are predicting a series of interest rate hikes in the coming year as the bank tries to cool inflation. Some traders are betting on up to six.

TD senior economist James Orlando said TD’s official call this year is for four rate hikes, though the markets are pricing for five or six. Four hikes would bring the Bank of Canada’s interest rates to 1.5 per cent.

“The Bank of Canada is a little bit behind the curve when it comes to inflation, but they’re going to hike really aggressively,” he said.

TD expects an early rate hike, said Orlando, so that the Bank of Canada can ease them in as much as possible.

One of the main intents of the rate hikes will be to cool Canada’s housing market, which has been fuelled in part by dirt-cheap mortgages, said Orlando.

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